Economists believe the decline in owner-occupier home loan approvals will soon resume, with October’s 2.2 per cent rise likely to be nothing more than a “dead cat bounce”.

The number of owner-occupier approvals broke from the previous two months of declines, according to seasonally adjusted data released Monday by the Australian Bureau of Statistics.

That easily beat consensus forecasts of a 0.4 per cent decline, but economists warned the respite is likely to be temporary and that the underlying downward trend remained intact.

Referring to the fact that even totally lifeless things can bounce if dropped from high enough, St George economists called the jump a “dead cat bounce”.

“Today’s housing-finance data does not change the narrative of a housing downturn that has further to run,” they said.

“Softening trends in pre-sales activity, auction rates, dwelling approvals and dwelling prices add to the evidence that we should expect more declines in housing lending and dwelling prices.”

The value of total housing finance was up 2.6 per cent at $30.03 billion for the month.

The value of new home loan approvals for owner-occupiers was up 3.5 per cent, while the value of investor loans was up 0.6 per cent.

But Westpac’s Matthew Hassan agreed “the picture around housing markets is still unambiguously weak”.

Corelogic data out Monday showed capital house prices fell another 0.4 per cent last week – with Sydney and Melbourne again leading the falls – and 5.9 per cent over the past year.

JPMorgan’s Tom Kennedy outlined the reasons for economists’ pessimism, citing construction data, prices and tightening of credit by banks in response to pressures including regulatory oversight.

“Data can be volatile from month-to-month and October’s release does not change our view that credit growth will remain under pressure in 2019,” Mr Kennedy said.

“Underpinning this expectation is our view that near-term supply and demand dynamics are less favourable than in previous years, with the record number of higher density dwellings currently under-construction likely to be completed in the next few quarters and further weigh on prices, reducing speculative demand for housing.”

The Australian dollar lifted from 71.89 US cents just before the data’s release to 72.17 US cents at 1355 AEDT.